HOW ENDING TARIFFS CREATED A WORLD-CLASS WINE INDUSTRY IN ONTARIO.
DON’T BELIEVE THE DAIRY CARTEL’S DIRE PREDICTIONS — TARIFFS CAN BE ENDED
Dorothy Williams, an Ontario wine maker, felt betrayed when she had to cut down her cultivated vineyard where the native Labrusca grape had flourished for many seasons. Back in the 1990s, one of the biggest casualties of the NAFTA agreement was the Ontario wine industry. Canada had agreed to the elimination of protectionist tariffs on Canadian wine — tariffs that up til then had protected Ontario winemakers. Many Ontario winemakers had sold relatively low-quality and low-priced wine; foreign cheap wine was prevented from entering due to prohibitive tariffs. Ontario vintages then were cheap whites that always tasted the same. There was very little product or brand innovation.
When the tariffs were eliminated, there were many predictions of doom. Ontario wine makers felt that they had been thrown under the bus. As part of the elimination of the protectionist tariffs, Canada had negotiated a phase-in period to allow the winemakers to get ready for the changes, and the Canadian and Ontario governments invested millions of dollars to support the industry in its quest to reposition and rebrand itself.
The two key parts of the plan were to increase the quality of the wine and promote the wine makers of Ontario. Wine experts from around the world determined which grapes had the best potential, given the unique Canadian climate. They were able to determine, after experimentation, that Ontario’s wine growing region in and around Niagara had a similar physical location and cool climate to the Burgundy region. Pinot Noir grapes were found to thrive in Niagara. Riesling, a more finicky grape, also turned out to be perfect for the region. Riesling often gets a bad rap as being too sweet. Some Niagara wine makers innovated and developed a “drier” Riesling; Cave Springs winery cleverly branding theirs “Off Dry” — a new world-class white wine. Continued experimentation led wine makers like Henry of Pelham and Peninsula Ridge to start turning out world-class red wines as well, including Pinot and Baco Noir.
The wine industry had a challenge that our dairy farmers don’t have today — winery owners had to actually rip out all of the prevalent native Labrusca grape plants and start all over with the more appropriate higher-quality options. Once the new grapes started to produce quality wines that could be competitive, the wine makers invested to make visits to Ontario wineries a great experience for locals and tourists. Visits to an Ontario winery became a good predictor of future Ontario wine purchases. Ontario wines went from something you might buy for yourself to a gift you were proud of bringing to a dinner party.
The second phase of the plan involved a successful multimedia TV-anchored communication campaign, supported by the government of Ontario, to help set new expectations consumers could have when trying an award-winning Ontario wine proudly produced by expert winemakers.
These experiences offer the Canadian government a model to the phasing out of the anti-competitive and regressive dairy supply management system. This would properly require a phase-in period, and government support during the transition — but the benefits are obvious.
As has been noted many times, Canada’s dairy protections drive up the cost of food staples in Canada, and complicate our international trade efforts. Supply management’s time has passed, but, contrary to the gloomy predictions, this need not mean the end of a Canadian dairy industry — just as it didn’t mean the end of Ontario’s wineries.
Canadians were ready to support great quality Ontario wines — in fact, BrandSpark research uncovered that a key driver of the purchase of wines from Ontario was the pride in knowing the grapes and wine were completely produced in Canada. I believe Canadian dairy brands could count on similar consumer loyalty and a willingness to support market-based price premiums if they knew that the milk and butter that went into the dairy products came from Canada. Canadians would also be able to enjoy the best of what the world had to offer at more reasonable prices.
It’s time to end dairy supply management in Canada, and if anyone tells you it can’t be done, send them a bottle of a fine Ontario wine. It’s all the proof they’ll need that yes, it can.
DAIRY PROTECTIONS DRIVE UP THE COST OF FOOD STAPLES.